In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA NVDA and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
NVIDIA Background
Nvidia is a leading developer of graphics processing units. Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence. Nvidia not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. Nvidia is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| NVIDIA Corp | 57.04 | 53.69 | 31.71 | 31.13% | $22.86 | $26.16 | 93.61% |
| Broadcom Inc | 180.27 | 16.11 | 21.54 | 6.49% | $7.29 | $9.0 | 51.2% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.98 | 8.95 | 13.46 | 8.36% | $555.05 | $439.35 | 38.95% |
| Advanced Micro Devices Inc | 110.95 | 3.57 | 8.44 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 17.65 | 6.67 | 4.58 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 35.41 | 10.06 | 11.13 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 233.24 | 24.66 | 42.40 | 1.83% | $0.11 | $0.81 | 4.71% |
| Analog Devices Inc | 65.66 | 3.04 | 11.39 | 1.36% | $1.12 | $1.42 | -10.06% |
| Micron Technology Inc | 25.75 | 2.14 | 3.47 | 4.07% | $4.3 | $3.35 | 84.28% |
| Microchip Technology Inc | 40.05 | 4.93 | 5.71 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 69.88 | 12.86 | 14.87 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 15.86 | 3.17 | 3.77 | 4.75% | $0.63 | $0.8 | -19.21% |
| ASE Technology Holding Co Ltd | 20.65 | 2.37 | 1.24 | 3.16% | $28.59 | $26.43 | 3.85% |
| STMicroelectronics NV | 10.05 | 1.25 | 1.61 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 16.06 | 2.63 | 5.21 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 10.55 | 1.48 | 2.36 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.08 | 2.24 | 3.43 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 131.28 | 8.97 | 13.77 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 55.18 | 11.04 | 13.86 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 30.43 | 4.53 | 11.22 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 59.31 | 6.88 | 10.18 | 4.08% | $33.46 | $27.2 | 8.01% |
By closely examining NVIDIA, we can identify the following trends:
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The Price to Earnings ratio of 57.04 is 0.96x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 53.69, which is 7.8x the industry average, NVIDIA might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 31.71, which is 3.11x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 31.13% that is 27.05% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 93.61%, outperforming the industry average of 8.01%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By analyzing NVIDIA in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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In terms of the debt-to-equity ratio, NVIDIA has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.16.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, low EBITDA, low gross profit, and high revenue growth suggest that the company is performing well and has strong growth potential within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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